Its no secret that panda and penguin has struck many webmasters worldwide right where it hurts, ranking. Panda rolled out the first official update to the algorithm in February 2011, followed by the Penguin update first announced on April 24, 2012. Both aimed directly at lowering the ranks of "low quality" sites with high PR.
For those attacked by panda or penguin, a solution is available to help you clean up those spammy back links that got you penalized in the first place..
Matt Cutts from Google search engine spam team, released this video last week....
Anyone who received a warning from Google or anyone who has actively participated in link farms and want to be proactive.Steps to take
Step I: Login to Google webmaster tools, if you do not see the Disavow links Tool on the left tab, use the "help with" search section on the left hand side. Here is the direct link to the Disavow links Tool
Step II: Open up a text file a put include one URL per line. Use # for comments. Below is an example:
# Contacted owner of pandahatesme.com on 7/8/2012 to # ask for link removal but got no response domain:pandahatesme.com # Owner of pandahatesme.com removed most links, but missed these http://www.pandahatesme.com/spammy.html http://www.penguinhatesme.com/spam.html http://www.otherspammydomain.com/spammer.html
Step III: Save the file as "Disavow.txt" or whatever you want to name it.
Step IV: Upload it, done!!